When you hear the term "growth stock," what comes to mind? Many investors would probably first think about some well-known tech stocks out there. And while it's true that many growth stocks are to be found in the technology sector, there are just as many compelling growth stocks making names for themselves in other economic sectors too.

If you are a growth-focused investor looking for some diversification for your portfolio, finding some non-tech stocks that still provide growth seems prudent. One sector that can offer that diversity while still generating growth is healthcare.

It's a sector offering goods and services that are necessary and in demand. And segments within it are pretty good at turning healthy profits. For instance, as the number of individuals with chronic health conditions rises, so does the demand for health insurance to help manage the costs. The growing need for health insurance is evident from projections compiled by market research company Facts & Factors, which projects the global health insurance market will grow from $2.1 trillion in 2021 to $3.6 trillion by 2028 (a 9.5% compound annual growth rate).

Few companies are positioned to cash in on this trend as much as managed care company Molina Healthcare (MOH -2.42%). Let's dig deeper into why the health insurer is a no-brainer buy for growth investors.

Membership growth resulted in robust revenue and earnings growth

Molina Healthcare's niche as a health insurer is that it offers government-sponsored health insurance. This includes Medicare and Medicaid programs, as well as state health insurance marketplaces. The health insurer's membership base of more than 5 million customers in 19 states makes it one of the largest health insurers in the United States.

The company recorded $7.9 billion in revenue during its third quarter, which was 12.6% higher year over year. Despite Molina Healthcare's impressive size, the California-based insurer continues to churn out double-digit growth for shareholders.

Molina Healthcare's membership base grew 7% over the year-ago period to 5.2 million in the quarter. The company's acquisition of Affinity Health Plan last October added 310,000 members to that overall total. That, plus organic growth in Molina Healthcare's Medicaid and Medicare businesses and higher health insurance premiums explains the tremendous revenue growth for the quarter.

The company's non-GAAP (adjusted) diluted earnings per share (EPS) soared 54.1% higher year over year to $4.36 during the third quarter. Because operating expenses in Q3 grew at a slower rate than revenue (11.3%), Molina Healthcare's non-GAAP net margin surged nearly 90 basis points higher over the year-ago period to 3.2%. Add in a 0.3% reduction in the company's diluted weighted average outstanding share count to 58.3 million, and it becomes clearer how adjusted diluted EPS growth far outpaced revenue growth for the quarter.

As the company executes more bolt-on acquisitions and the appetite for health insurance increases, analysts believe Molina Healthcare will generate 16.7% annual adjusted diluted EPS growth for the next five years.

A patient and doctor speak to each other during an appointment.

Image source: Getty Images.

Rock-solid financial health

Molina Healthcare operates among the top players in a growing industry. And the cherry on top is that the company possesses a sturdy balance sheet.

Analysts forecast that Molina Healthcare's net cash position will be $2.2 billion in 2022. Net cash is calculated as a company's cash and cash equivalents minus its liabilities balance. A positive balance means the company has more funds on hand than it owes through long-term debt and other debts. Given that Molina Healthcare's market cap is $19.9 billion, this is a sizeable net cash position that the company can use for future acquisitions or share repurchases.

Gangbusters growth at a discount

Due to its dependability, Molina Healthcare defied the market downturn so far in 2022. The stock is up 7% for the year, yet it still is priced at a bargain-bin valuation.

Molina Healthcare's forward price-to-earnings (P/E) ratio of 16.7 is a tad below the healthcare plans industry average forward P/E ratio of 17.2. But the icing on the cake is that the company's 16.7% annual earnings growth potential is well above the healthcare plans industry average annual earnings growth consensus of 12.7%. Simply put, Molina Healthcare deserves to be trading at a premium to its peers.